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Texas - House Committee Gives Tesla Motors a Chance

Discussion in 'News' started by SCW-Greg, Apr 23, 2013.

  1. SCW-Greg

    SCW-Greg Active Member

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    From Texas Tribune - "House Committee Gives Tesla Motors a Chance"

    "Updated April 23, 6:25 p.m.
    The House Business and Industry Committee advanced a bill on Tuesday that would allow Tesla Motors to circumvent the state's franchise dealer system and sell cars directly to Texans, giving a shot in the arm to the company's efforts to operate in the state.

    ....

    House Bill 3351, by state Rep. Eddie Rodriguez, D-Austin, was replaced by a committee substitute that offered auto dealers another layer of protection: If Tesla ever sells more than 5,000 cars a year in the state, they will become subject to existing regulation and must start to franchise their operations.

    With Tesla projecting sales of only a few hundred cars a year in the state, the bill's supporters, including Diarmuid O’Connell, the vice president of business development for Tesla motors, called this a workable approach."
     
  2. K Hall

    K Hall Member

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    Dumbest addition that I have ever seen.
     
  3. Doug_G

    Doug_G Lead Moderator

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    Oh, so we'll only stick government's nose in your business if you're wildly successful. Sounds like a recipe for free enterprise. Sure.
     
  4. Grendal

    Grendal Active Member

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    It's a start and it's more than what we had.

    I'm guessing that this is 5000 cars total for the company. So once they get the Gen III moving then it could be a real problem.
     
  5. SteveG3

    SteveG3 Active Member

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    In a recent interview Elon said at the point of selling 150,000 cars per year the franchise model could make sense economic sense for Tesla. This may be his trying to play nice, but 5K in Texas would probably be only a few years before 150K nationally, so likely not too challenging a complication. I listened to the hearing a couple weeks back, and Elon said Tesla would be open to this kind of compromise (fwiw, representatives of dealers said they were not open to such compromise).
     
  6. Eberhard

    Eberhard #421 Model S #S32

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    this regulations in texas is really a joke. no free trade in amerika? texas an learn a lot from old europe!
     
  7. Lyon

    Lyon 2016 S P100DL, 2016 X P90D

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    Wow, sounds like special interests are having their way in Texas. It's a start at least and Tesla will have a few years to demonstrate that the idea of franchised dealerships protecting consumers is a fallacy.
     
  8. gg_got_a_tesla

    gg_got_a_tesla Model S: VIN P65513, Model 3 Res Holder

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    Wouldn't 5,000 Model S and X sales happen in quick time, even in Texas? Last I recall from someone's post, Texas ranked third or fourth behind Calif., Florida and maybe, Washington state in S reservations?! We've already seen more than 3,000 S sales in Calif. alone in just over 4 months of full production.

    This seems to be a short-sighted compromise on Tesla's part IMO...
     
  9. SteveG3

    SteveG3 Active Member

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    Texas, a bit under 10% of population, so threshold crossed roughly when Tesla selling 50M cars in U.S. That would be something like 125M globally per year... a threshold that probably won't come until Gen3 greatly increases sales.

    California unlike anywhere in U.S. re Tesla... that 3,000 mark was 50% of total deliveries at the time.
     
  10. Zzzz...

    Zzzz... Member

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    Probably still better then no deal at all? I agree, Tesla would need a long term solution in Texas eventually. But for next couple years it still would be easier for them to operate there...
     
  11. Benz

    Benz Active Member

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    The last two sentences of the article are:

    ------------------------------
    But Musk told the Tribune in an interview that the bills seemed unlikely to succeed this session.

    “The consensus among the auto industry is that we’re not going to succeed,” he said. “But if we don’t succeed this session, we’ll come back again.”
    ------------------------------

    When will Elon Musk be back again?
    When will a next session going to take place?
    Is that a matte of weeks/months/years?
     
  12. ItsNotAboutTheMoney

    ItsNotAboutTheMoney Active Member

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    It's still obscene. But ...

    Any of you wealthy Texas Tesla enthusiasts want to start a non-profit dedicated to maximizing the purchase of electric cars?
     
  13. DriverOne

    DriverOne Member

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    During the hearing this rep kept bringing up this idea of a 5,000 limit, so it doesn't surprise me that he added it. Where he got the idea from and where he got the number 5,000 I've no clue. IIRC Elon hedged that a limit like this might be workable, so long as it didn't box Tesla into a corner in the future.
     
  14. SCW-Greg

    SCW-Greg Active Member

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    I'm with others here, that think 5000/year is a comfortable lid for next two years until the Gen III hits. By that time, if all goes well, Tesla's success all across the country should make it apparent that these antiquated dealer laws need to give way - figuring Texas by that time might be the last standing state. Or certainly prevailing winds will keep the pressure on the lawmakers.

    Quite honestly Tesla is single-handedly bringing the EV tipping point to the industry. The Gen III needs to happen sooner than later. A lot can happen between now and then, but once it hits, game over.
     
  15. adiggs

    adiggs Active Member

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    If the nature of the 5,000 car in one year limit is that Tesla no longer gets the franchise, then I'm thinking this might look good to the Texas auto dealers, without actually being very restrictive to Tesla. Tesla gets to provide a quality sales and ownership experience immediately and for the next few years, and just decides now that when the time comes, either the law is changed again, or Tesla pulls out of the state (returns to the current situation). That's very bad looking for Texas, and if Texas is actually a good location for a second factory (I don't know one way or the other), then this becomes an important reason not to build that factory in the state (why would we build vehicles in a state where we can't sell them?). More bad press for pro-business Texas.

    Tesla can also keep the number of retail stores it opens lower than the state might otherwise warrant, as a mechanism to slow down sales in the state. Wouldn't want to invest too deeply in a sales network that has an axe hanging over it after all.

    Bottom line - if 5,000/year gets enough votes to get the exception through, grab it and run, and deal with the consequences later. I see minimal downside to Tesla, and lots of downside to Texas. Especially once there are several thousand Model S's and Model S owners in the state. People who show up and participate in the legislative process.
     
  16. ggies07

    ggies07 Active Member

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    From the article: House Committee Gives Tesla Motors a Chance | The Texas Tribune


    “I would be wary, as a consumer, of buying a car from a manufacturer that may or may not be here in six months.”

    hahaha, WHAT? They have been around longer than that selling cars and now making a profit, so I think it's safe to say they will be around longer than these ill-informed politicians think. Man, their thinking really infuriates me.
     
  17. bonnie

    bonnie Oil is for sissies.

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    Dealers represented Fisker Automotive. Now that FA has gone belly up, the dealers are quickly washing their collective hands of any obligations (well, almost all). So it's a little hard to claim that the dealers would protect the consumer in the event of a company failure, since clearly they do not.
     
  18. ggies07

    ggies07 Active Member

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    This whole situation really irritates me when we have very conservative politicians debating on being American and how they are the best at representing the people during elections, but here we are, having an American company producing an all American product and it can't be sold in a state. Ridiculous.
     
  19. JohnQ

    JohnQ Active Member

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    This seems to be a politically workable solution for the TX legislature and gives Tesla some breathing room. The camel's nose is in the tent, once they hit 5k sales there will be a track record of this being successful and it will be harder for the legislature to push back. Plus, more owners to apply pressure.

    If Tesla ultimately decides a dealership network is needed in the future then they've not burned too many bridges here.
     
  20. jaysquyres

    jaysquyres Member

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    TexasLegislature Online
    Bill Alert


    83(R) HB 3351
    Relating to manufacturers and distributors of only all electric-powered or allbattery-powered motor vehicles.
    4/23/2013 H Reported favorably as substituted HB3351.jpg
     

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